Life Policy ProvisionsQuestion 169 of 315
A spendthrift clause attached to a life insurance settlement is designed primarily to do which of the following?
a.Require court approval before any payment is released
b.Increase the rate of interest paid by the insurer
c.Protect the proceeds from claims of the beneficiary's creditors and from the beneficiary's own assignment
d.Allow the beneficiary to withdraw the entire balance at any time
Explanation
A spendthrift clause restricts the beneficiary's ability to anticipate, assign, or otherwise transfer future installment payments. It also shields those future payments from most creditors, helping protect a beneficiary who may be financially unsophisticated.
Law Reference: Cal. Ins. Code §10130.5Practice all 315 questions free — no signup required.
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Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)